The Lasting Effects of Brazil’s Olympic Stadiums

The most recent reporting out of Brazil has indicated that stadium construction for the 2016 Summer Olympic Games is still not complete and that the organisers will be hard-pressed to finish all flourishes before the opening ceremonies on August 5. All told, Brazil will have 32 competition venues for the Olympics, 20 of which have been constructed for the event. Ticket sales have been underwhelming, and local interest in the Olympics pales in comparison to past host cities. It remains an open question whether the city will be ready to go in about a month’s time.

Regardless of whether the Games are deemed a success, Brazilian authorities should be also considering what to do with this newfound glut of sports facilities over the long term. What should be viewed as a massive opportunity to update and extend the city’s sports, entertainment and tourist infrastructure could instead go to waste if Brazil follows the path trodden by many other host cities in the recent past.

The Olympics: a checkered history with reusable infrastructure

Of course, these long-term concerns aren’t unique to Brazil. Most Olympics have struggled to incorporate constructions made for the Games for a larger civic purpose. Athens, the host of the 2004 Summer Games, built two dozen facilities for the Games at a cost overrun speculated to be as high as 60 percent and without much plan for future repurposing; predictably, many of the facilities have been abandoned and linger as eyesores that anchor the city’s host neighbourhood. Beijing has yet to convert the centerpiece of its Games, the architectural marvel Bird’s Nest stadium, into a regular-use facility despite estimated annual costs to keep it running of $11 million. Even, Sochi, the host city for the Winter Olympics just two years ago, has seen most of their facilities go idle despite great plans to use the Games to generate consistent winter tourism.

Some of this is expected: there is only so much retrofitting that city planners can do to convert a badminton or handball arena into a space that can be used consistently and profitably afterwards, and no city has perfectly reincorporated all their Olympic facilities into daily civic life after the crowds have left.

However, given the expense of constructing and maintaining such facilities, a number of host cities coordinated their construction plans with an eye to the future. Montreal, the host of the 1976 Summer Olympic Games, converted the Olympic Stadium used for the event into a baseball and American football stadium that was in constant use until 2004. Similarly, the 85,000-seat Centennial Olympic Stadium constructed for the 1996 Atlanta Summer Olympics was retrofitted immediately afterwards into Turner Field, a stadium still used by the city’s professional baseball team. Barcelona, the host in 1992, repurposed many of their facilities for a civic purpose; the Olympic pool was converted to a public facility. The Water Cube, the stadium that hosted the swimming and diving competitions in the 2008 Beijing Olympics, has been converted to an in-use water park, though it remains to be seen whether it can turn a profit without ample government subsidies.

Brazil’s recent history is cause for worry

A more appropriate benchmark is Brazil’s own hosting of the 2014 World Cup, which involved construction of 12 new stadiums. Less than two years later, the results can’t be encouraging for civic planners in Rio. The new stadium in Cuiabá was closed for “emergency repairs” despite costing over $200 million to construct. The stadiums in Natal and Recife haven’t had consistent tenants and have resorted to renting the facilities for weddings and private parties. The most famous boondoggle was the Arena de Amazonia in Manaus with a capacity of 44,300 despite being deep in the heart of the Amazon and without a strong local football team to support its size; it has predictably languished and is deep in debt.

Economists have long argued that stadium construction for one-time events rarely pay for themselves or result in long-term benefit. In cases like Brazil (much like Greece before it) where the local economy is already weak and not resilient enough to sustain future interest in these facilities, the likelihood of successful repurposing of Olympic venues is even less likely. Given the fact that the Brazilian economy is expected to continue to contract into 2017, many of these venues might not have much of a chance to escape this cycle before the economy improves. Hopefully the organisers have a well-developed plan for stadium usage in the future because it looks increasingly unlikely that the Brazilian government will be in a position to help sustain this investment over the near term.